CODE OF GOOD PRACTICE FOR RENEWABLE ENERGY IN ROMANIA 2021 - Wolf Theiss
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CODE OF
GOOD PRACTICE FOR
RENEWABLE ENERGY
IN ROMANIA
2021
Dear Reader,
Carlo Pignoloni
CEO, Enel Romania
President of the Board, RWEA
You may wonder why the Romanian Wind Energy Association (RWEA) decided to issue a Code of Good
Practice for the industry now, in 2021, more than 10 years since the first wind energy projects in the country
were commissioned. Wind energy, with more than 3000 MW installed, has become one of the major energy
sources in the country and last year accounted for almost 14% of the total energy produced in Romania.
While this is a very important share, adding to the sizeable quota of renewable energy generation in
Romania, it is quite safe to say that we are far from the country’s potential. RWEA members demonstrated
that they came to invest in the country for the long term, supported economic growth and technological
advance and are part of the backbone of the energy sector. But there is much more left to be done. At the
time when I am writing these lines, several new renewable projects have been announced in Romania by
different companies, and the pipeline is expected to grow significantly. This is a welcome development, as
Romania’s generation fleet is ageing and needs to be replaced quickly and at optimal costs. The country, its
economy and its people need access to affordable, reliable, sustainable and modern energy and one cannot
overemphasize wind’s importance.
This brings me to the purpose of this Code and its timing. In order to make this transition just, we need
to think of all stakeholders and improve the quality of life of citizens-customers. As technology is making
electricity increasingly cheap, stable and reliable, liberating it from the price fluctuations of fossil fuels,
RWEA companies are here to help Romania achieve its tremendous potential. Furthermore, the vector of
electricity enables us to use available resources more efficiently. In short, the benefits are enormous and
with renewables we can decarbonize electricity and consequently numerous other sectors of the economy.
This is a perfect example of technology being the climate’s ally.
Romania has a huge opportunity to let its energy sector drive and support the growth of the economy.
In other words, we are moving closer to the scenario that Thomas Edison dreamt of, in which one day
electricity would be “so cheap that only the wealthy can afford the luxury of burning candles”. We can now
imagine the time when we will not think about “renewable” energy, but just energy, because all energy will
be renewable.
Let us all work together to achieve this.
overview of renewable energy
N.B. by Renewable Energy Sources (RES) this code refers to wind and
solar energy and does not include hydro energy nor biomass.
Welcome to Romania’s first Code of Good Practice for
Renewable Energy Sources (RES)!
capacities in Romania
The present paper comes at a crucial time in the country’s
energy transition, to applaud past successes, highlight sector
specific challenges and opportunities, and bring together
public and private stakeholders united by one simple mission – creating a framework that is both climate friendly
and economically viable, for the generations to come. MARAMURES BUCOVINA
110.1 MW 0.7 MW
RWEA (Romania’s Wind Energy Association) compiled the lessons learned by a 10+ years mature industry to kick 1.3 MW
off a second wave of RES developments with a long-term vision in mind. The country’s National Energy & Climate
Plan (NECP) envisions an additional 6 GW of RES capacities needed by 2030, which in turn means immense
economic opportunity and the birth of a national industry supply chain.
MOLDOVA
CRISANA 263 MW
The Code of Good Practice follows three overarching goals: 11.5 MW 42.7 MW
TRANSILVANIA
101.9 MW 1.4 MW
to guide existing and potential investors in the journey of setting up wind and solar farms in Romania, from
280.1 MW
permitting and community engagement to grid connection and decomissioning
to extend a collaborative hand to public authorities, suggesting ways to integrate the EU energy transition BANAT
agenda into Romania’s national plans, benefitting the overall economy and future of our people 57.1 MW
53.4 MW
to advocate for the variety of side industries that have room to develop in Romania and in this way attract new
DOBROGEA
players to our national supply chain
OLTENIA MUNTENIA
1.8 MW 225.5 MW
200.7 MW 730.7 MW
2475.2 MW
17.1 MW
Due to the very favorable wind conditions Romania boasts
Dobrogea dominates Romania’s map in terms Europe’s largest wind park:
of installed wind farm capacity, capturing nearly Fântânele Cogealac (600 MW)
2,500 MW out of the country’s total 3,000 MW
installed power. Other areas such as Muntenia,
Banat and Moldova present ample opportunity
for development as well.
Solar farms are more evenly spread out between
total
the regions. Muntenia is leading with 730 MW installed capacities
installed capacity, followed by Transilvania (280
MW), Oltenia (200 MW) and Crișana (101 MW).
Most regions are suitable for additional solar farms
thanks to generous environmental conditions.
4 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 5
contents 52. technical considerations
54. the National Power Grid
56. Interview: Adrian Goicea, Transelectrica
58. operation & maintenance
59. repowering & lifetime extension
61. decomissioning & site maintenance
62. workforce & skills
10. RES history at a glance
64. health & safety practices
12. the RES boom of the early 2010s
66. Interview: Daniel Burlan, CE Oltenia
14. road to 2030: a decade of opportunity
15. how does the European Green Deal
impact Romania?
16. Interview: Dan Drăgan, Ministry of Energy 68. technologies of the future
18. thoughts from the industry 70. offshore wind potential
20. creating national value 72. green hydrogen
22. Interview: Zoltan Nagy-Bege, Romanian 73. energy storage
Energy Regulatory Authority (ANRE)
24. unprecedented financial instruments
74. local partners
30. RES development
from A to Z
33. understand the legislation
36. choose and secure your location
38. engage the community
40. obtain the necessary permits
46. register to sell electricity RES potential development technology &
48. deal-making in the new wave of RES in Romania step by step workforce
investments
6 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 7
a second wave of RES development
2018
RES history First MW of renewable energy storage is installed in Romania.
at a glance
Following Brussels’ call to action towards member states to contribute 2019
2 to the joint EU RES target for 2020, Romania commits to a share of 24%
of renewable energy in its final energy consumption. The Government
Prosumer legislation enters into
force. The Environment Fund
0 sets forth a Green Certificates support scheme to encourage
development and sends the market into a period of effervescence -
local and international investors alike gear up to seize the opportunity.
Administration (AFM) agrees
to co-finance up to 90% of the
0 What follows is a period of growth and steep learning, as both
authorities and industry players work to bridge the knowledge gap in
2015
Romania reaches its RES target
total investment in rooftop PV
systems for households, and
makes available a budget of
aprox. EUR 100 mil.
8 a field that is just taking shape in Romania. RWEA also comes to life,
providing a common voice to the needs of the industry.
for 2020 ahead of schedule.
Hydro brings a significant
contribution.
2020
The final version of the
Romanian National Energy-
Climate Plan (NECP) is set forth.
2011 Romania commits to a target
of 30.7% overall share of
The framework proposed by
renewable energy in its final
the Government is adjusted
energy consumption. This
shortly after its launch, and
translates to another 6.9 GW
legislative changes continue
of renewable energy capacities,
to be introduced in the
coming years. Unfortunately 2014 2016 on top of the existing 4,5 GW.
the amendments made are Romania reaches 4GW installed The support scheme comes to an
mostly to the detriment of power from renewable energy end, meaning new developments
RES developers. sources. no longer benefit from green
certificates. However, developers
Romania quickly reaches In November, the day-ahead who built before December 2016
850 MW of installed power
from RES (mostly in wind
energy capacities).
2012
Fantanele-Cogealac Wind Park
market in Romania starts
operating in a coupled way with
the markets in the Czech Republic,
can continue trading them until
December 2031. Overall the market
slows down. 2021
Hungary and Slovakia. Energy efficiency & green energy become one of the six pillars
is finalized. Romania now boasts The country reaches 4,5 GW of the The National Recovery and Resilience Plan. The initial
Europe’s largest onshore wind park Industrial consumers are installed power from RES. negotiating budget is set at EUR 1,3 bn.
(600 MW). exempted from the obligation to
purchase green certificates. Romania joins the Paris Agreement. The market enters a second wave of development.
10 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 11
Bearing in mind this criteria, Romania’s RES target Romania’s electrical energy mix (% output)
for 2020 was set at 24% of the national final
energy consumption. This ambition was reflected 0.5
3
in Law 220/2008, alongside a national system of
subsidies based on green certificates (GCs) meant 10.5
the RES boom
to incentivize production. In a nutshell, RES power 24
producers were awarded GCs in proportion to the COAL
amount of energy they produced and the type of
of the early 2010s
HYDROCARBONs
RES technology they used. GCs were tradable on NUCLEAR
HYDROPOWER
a dedicated centralized market, at minimum and 28
WIND
maximum price levels set by the law: EUR 27 and SOLAR
16
EUR 55 respectively, indexed with inflation. The RES BIOMASS
support scheme was approved by the European
Commission in July 2011, which promptly triggered
Romania’s renewable energy industry now finds itself at an an unprecedented wave of investment in clean
18
unprecedented point, one in which all signs are turning green and not power generation in Romania.
only the environment, but the economy stands to gain immensely source: Investment Reports, 2019
from the projected growth. In order to better understand how we So strong was the incentivizing power of that
got here, and what there is to look forward to, let’s have a brief look support scheme that it soon became a victim of its
at the past. Evolution of RES support scheme in Romania
own success. Already in March 2014 the support
scheme was curtailed by means of governmental
In 2009, Romania, a recently admitted member state of the EU, adopted decision, which blindsided investors, especially in WIND 2011 2 1.5 2016
Directive 2009/28/CE meant to promote the use of renewable energy the solar PV sector. The turbulence that ensued 2014
sources. The RES Directive introduced the obligation of member was similar to what had happened in many SOLAR 6 3
states to contribute to the joint EU RES target for 2020, namely 20% European countries at the time, a period of boom
of the final gross energy consumption. and bust, followed by a general slow-down in The number of GCs awarded by the state was
development. The support scheme was applicable drastically curtailed in 2014.
In setting the national RES targets, which were negotiated member to RES projects commissioned prior to December
state by member state, the defining criteria were the following: the 31st 2016, but producers are still able to gradually
starting point and the country’s RES potential, the domestic gross sell their certificates up until 2031.
product and the final gross energy consumption, and the measures
adopted in the past in support of RES. where to from here?
All things considered, the green energy segment had its share of challenges in Romania as in most
Evolution of installed power from RES (MW) other jurisdictions. However, new projects have been announced as of 2021, foretelling a new wave
of developments. The overarching market fundamentals point not only to a repeat, but a surpassing
of the 2010-2013 investment boom. This new phase of effervescence is driven by a now more mature
market, with past lessons learned, superior technology and the regulatory backing it needs to propel
it forward. The COVID-19 crisis, if anything, amplified the awareness of businesses, governments and
citizens to the economic necessity to diversify energy sources.
The publication of this Code of Good Practice comes at an auspicious time to bring together shared
experiences, current priorities and future recommendations for private and public stakeholders alike.
Its ambition is not to serve an exhaustive or rigid to-do list, but rather to highlight more efficient,
fair and forward thinking actions that benefit not only the industry, but Romania’s economy and
community at large.
12 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA source: Eurostat, 2020 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 13
how does the
European Green Deal
impact Romania?
road to 2030:
The final version of the Romanian National Energy-Climate Plan commits to 6.9 GW of wind
and solar power by 2030, on top of the existing 4.5 GW, potentially turning Romania into a
In December 2020, leader of RES development in Central and Southeast Europe.
a decade of the European
Commission agreed According to the NECP, the total investments needed for this transformational process would
opportunity
to raise the 2030 amount to more than EUR 22 bn (including other investments in the grid and conventional
GHG emission capacities), an order of magnitude that makes investments in clean energy a pillar of
reduction target economic development and industrial strategy.
to at least 55%
compared to 1990,
Can Romania repeat an investment boom in renewable energy To meet the overall RES objectives and the intermediary trajectories, the NECP proposes the
as part of the
sources, even more expanded in magnitude and duration than following capacities to be installed in wind and solar investment projects:
European Green
the one of 2011-2015? Will the current ecosystem make way to Deal.
new, competitive, modern-day means of RES support? And will
Additional installed capacity 2020-2030 (MW)
the technical and administrative hurdles to RES integration into
the power system be eliminated at a sufficiently high pace?
wind +365
The answer to each of these questions is yes, and the reason has solar +556 +1,133
to do fundamentally with the EU’s grand vision to decarbonize +559 +528
the continent by 2050: the European Green Deal. We are talking Romania’s +822 +1,039
massive investments in green and environmentally friendly
technology, energy efficiency, and a move towards a clean,
RES
circular economy. In effect, as of 2050 any remaining GHG ambitions 3,037
+994
emissions in the EU’s economy would need to be balanced by for 2030
carbon sinks. The proposed regulation also introduced National 1,398
Energy and Climate Plans (NECPs) until 2050 calling on each
country to draw an action plan and commit to these common
goals. 30.7% 2020 2022 2025 2027 2030
share of energy from Besides new capacity, investors may consider repowering part of the existing renewables fleet
In 2020, the European Commission also released two game- renewable sources
changing strategies: the EU Strategy on Energy System Integration in the next ten years, approximately 3 GW of wind, as well as close to 1.5 GW of solar PV.
6.9GW
and the EU Hydrogen Strategy. The underlying idea of these two
documents is that renewable energy sources offer proven and At the end of 2020, the European Commission published its assessment of the NECPs and
scalable solutions for the decarbonization of over 60% of the the recommendation for Romania is to increase its level of ambition regarding the share
final energy consumption. How? By electrifying sectors such as new renewable energy of energy from renewable sources from 30.7% to at least 34%. But this percentage is likely
transportation, heating as well as certain industrial processes. capacities to end up even higher because Romania must adjust the NECP by 2023 to reflect the
European objective of at least 55% reduction in greenhouse gas emissions by 2030.
14 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 15
Dan Drăgan
State Secretary
Ministry of Energy
In what ways does the Ministry of Energy system. The 6.9 GW make for an ambitious
plan to contribute to the development of RES objective and requires considerable investment.
capacities in Romania at this point in time? The NECP will indeed be re-evaluated before
2030 (most likely in 2023) and the way forward
First off I would like to re-emphasize that the will not be one of reduction, on the contrary, it
Ministry of Energy and the people that are part will probably show even more openness towards
of the current administration, including myself RES produced energy. are certain legislative steps that still need to be
and Minister Popescu, support renewable taken before we are ready to kick off projects.
energy and see it as a vital component for the Even though some technologies have reached We also noticed a strong interest from Romanian
future of our country. It was in our responsibility grid parity, CfDs are seen as very useful by companies to become part of a hydrogen supply
to develop the National Energy and Climate Plan the industry - how far ahead are you in their chain, together with methane gas. By looking at
- according to it, by 2030 we will install another implementation? what other countries have done in this area we
6.9 GW of RES capacities, to meet the 30.7% will elaborate a strategy for hydrogen. I estimate
target we assumed. As you may have noticed, in Indeed many technologies have reached an that the first ideas and elements of the strategy
the past few months several companies in which LCOE (levelized cost of energy) that allows them will be launched by end of this year. We want all companies involved,
the state has a stake have announced plans to to function competitively on the market, but this from developers to component
invest in wind and solar projects. We find it doesn’t apply to all, depending on the operating One key mission during this wave of producers, to trust that the
important that all stakeholders participate in time and the price per MWh. In this sense the development is to grow the national supply Ministry of Energy is open to
this wave. Ministry is working with a team of consultants chain. Does the Ministry plan to support the discussions and committed to
on a first draft for CfDs. A first evaluation will be industry in this process? helping the market develop, in
The EU has recommended an even more launched publicly towards the end of this year. accordance with the strategies
ambitious target for Romania, of 34%? We trust that together with the Ministry of in place at both a national and
What are the specific intentions of the Ministry Economy we can come up with a few good European level.
We stay up to date with the debates that are when it comes to offshore wind and hydrogen? directions to help develop this industry segment.
taking place at EU level regarding the climate It is essential in our view to collaborate with
neutrality plans. No doubt Romania is one In the offshore area there are already several industry members on such topics, on our side
of the states that will require an accelerated companies (including partially state owned we are happy to offer support where we can.
development, but this must be done in ones) that have announced their intention to
accordance with the possibilities of the energy develop capacities in the Black Sea. But there
16 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 17
thoughts from
the industry
Adrian Borotea Florin Gheorghiu
Strategy & EU Agenda Director, CEZ Romania Director
Executive VP, RWEA Enel Green Power Romania
The speed with which we execute projects and put them into Radu Enache
operation is the defining element of RES technologies, and what Project Development, WPD
sets us apart from the other technologies present on the market. Board Member, RWEA
Our portfolio will remain focused on the needs of
the local communities it serves, especially now that
we have the support of a strong shareholder. We Olimpia Vădean In addition to achieving
plan to invest for the long term to future-proof the Financial Manager sound technical success, we
distribution infrastructure, and enhance its reliability, Verbund want to make sure that our
efficiency and safety. projects follow the best ethical
Verbund shelved its development
practices. They must have a
Andrei Manea activity in the past few years
We also see an opportunity to consolidate our genuinely positive impact on the
Board Member, RWEA but things are different in
leadership position in the Romanian RES market. Our community, and to this end we
2021 - we already started the
business wants to play an important role in achieving collaborate with “Local Action
reauthorization process for our
the country’s goal to install 6 GW of renewable energy Groups”, after all they are most
57 MW project and the intention
capacity over the next decade. familiar with local needs and
is to expand our presence well
priorities.
beyond this.
We also consider all aspects
surrounding environmental
A particularly favorable environment We started with the acquisition of a Luca Giacomelli protection, even those not
for renewable energy is taking shape small 7.5 MW solar energy project in Romania Area Manager required or specified by the law.
in Romania, but a great deal of work Stănești, but the ambition is to have HeliopolisRO
We consider that it is ours, the
remains to be done. Projects must be over 500 MW in renewable energy industry’s responsibility, to make
excellent from both a technical and by 2025, either through acquisitions Our roots are in engineering and sustainable development. Starting sure that the projects we engage
economic point of view, if they are to or through our own development with 2009 in Italy and 2011 in Romania, we have been active in the in have the smallest possible
access support schemes such as CfDs, efforts. In this effervescent market, field of renewables, developing and building a variety of wind and environmental footprint. We are
market mechanisms like PPAs or simply in which authorizations for old photovoltaic installations. We are currently developing a 500+ MW optimistic for the stage we are
to function on the competitive market. projects are being resumed, pipeline in Romania. We believe in the potential of this country and in and committed to developing
Half hearted efforts are no longer an Electrica Furnizare is prepared to particularly in light of recent EU directives are confident its national significant capacities in Romania
option in this new wave. join the wave. RES capacity will increase. in the next 10-15 years.
18 19creating
national 1
COMPONENT
2
distribution
3 DEVELOPMENT
value
MANUFACTURERS & delivery
6 5 4
The first wave of renewables development brought associated OPERATION & ELECTRICITY construction
investments of more than EUR 8 bn. However, the Romanian MAINTENANCE GENERATION
business environment was not yet ready to capture a significant
share, since most of the components were imported, leaving
development, construction and the O&M side to international
actors. With this new wave of development, the Romanian
economy has come into its own and it is now high time for it to
SUPPLY chain
7
capture a significantly larger share of value creation. REPOWERING
STRUCTURE
The opportunity for a strong local supply chain is rooted, on the
one hand, in the fact that already installed capacities require
progressively more complex maintenance work, and repowering Throughout their positions
As dwindling and participation in public
operations are on the horizon. On the other hand, Romania will technology prices
need significant resources (financial, human and technical) to
install new capacities (be they photovoltaic, onshore or offshore
put pressure on events, such as RESInvest, the
Romanian renewable industry
ways to attract new
the cost of labor in
wind), resources that the country does not currently have. Western Europe, constantly called for support
to attract and develop local
manufacturers &
Sourcing components and services from international markets is
an option, but this comes with a multitude of disadvantages, from
it makes ever
more sense to value chains, based on the size
of the national and regional
service providers
high transportation costs to long purchasing timelines. Producing relocate part of
components for wind turbines or PV panels, software or storage the manufacturing markets. Romania finds itself
equipment are just a few examples of what can be done here, and chain towards at a crossroads, and growing
An efficient promotion to domestic and foreign players
that can contribute to the broader development of the Romanian Eastern Europe. the local supply chain means
of the timely opportunity for a RES supply chain in
economy. taking the road to slowly closing
Romania (i.e. through programs such as RESInvest
the socio-economic gap with
initiated by the industry in 2021).
So far there are local productions sites for bearings and forgings, along with ones for generators and Western European countries.
electrical control systems for turbines. In addition, Romania benefits from the experience of a wind A reliable forecast of the needed volumes of equipment
turbine technician training center in Constanța, that has been producing experts covering the needs Undoubtedly, the RES sector
and services to create long term visibility for investors.
of multiple regional markets and is already preparing offshore technicians. has a significant potential of
offering quality, well-paying
An incentivizing national framework (eg. green financing
In the case of a sustained development of offshore wind in the Black Sea, Romania has a major asset jobs, but smart and forward-
instruments, tax incentives, minimum local content).
in Constanța Harbor, that components manufacturers can take advantage of for transportation and looking state policies must be
shipping purposes. In addition, integrating new renewable energy capacities opens opportunities for adopted in order to create the
Training & recruitment programs to expand the available
developing the clean transport sector (including charging infrastructure), as well as energy storage right investment environment
talent pool.
solutions, allowing battery and hydrogen value chains to be developed at the national level, with and the needed human capital.
applications also in decarbonizing heavy industrial processes, besides sustainable transport.
20 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 21WindEurope Study, 2019 Deloitte Study, 2019
wind energy and economic renewable energy in Romania:
recovery in Europe potential for development by 2030
The wind energy industry contributed more than EUR 37 bn to For the analyzed period 2021-2030 the overall impact generated by wind farms in the Romanian
the EU’s GDP (about 0.26%). Over EUR 23 bn came as direct economy amounts to an estimated added value of EUR 5.47 bn. The direct impact (EUR 2.52 bn)
contribution and EUR 14 bn indirectly, for both onshore and includes the investments and development activities for wind power plants and the indirect impact
offshore activities. Wind turbine manufacturers and developers (EUR 2.95 bn) represents the sum of all activities carried out by the suppliers and subcontractors of
have the highest share of contribution to the GDP, followed by wind power plants.
manufacturers of parts and components, offshore substructures
and service providers. In 2019 wind energy was also responsible
for the creation of over 300,000 jobs, a quarter of which in the the projected impact of investment in
offshore segment. wind energy projects and electricity grids 2021-2030
Sorin Poteraș
General Manager
2021 2030
Schaeffler Romania bn EUR
contribution
to EU GDP (0,26%)
in wind
power plants
in Romania’s
We own three production economy
units in Romania, one of in transmission &
which is fully dedicated to distribution grids
large bearings. It handles wind energy
both mass-produced pieces as contribution
well as wind turbine solutions,
delivered to global customers.
The current global context
raised challenges in terms of
supply of raw materials and
Dan Petre
components - in general we
jobs Country Manager, Vestas
at EU level in 2019 Board Member, RWEA
source them from external
partners, but we would like
to see local supply chains Some of Romania’s industry strengths lie in the quality
developing here as well. installed of human resources and the high level of operation and
wind bn
power EUR maintenance services. At this point in time we anticipate
Our experience in Romania ONSHORE a growing number of investors, including small local ones
has been positive overall, who are starting to see the huge opportunity brought by the
it provides an environment bn
EUR second wave. We service customers of all sizes, from one
fit for development and a OFFSHORE turbine to large scale parks, and are at the ready including
well trained and competitive on the offshore front once Romania starts development in
workforce. the Black Sea.
22 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 23Why do you think that an auction-based mechanism is the most likely to work? And what are the
associated risks?
I am concerned that if we simply publish this data (important for any investors/developer) we will
only increase the value of the land around those points. So it would be useful to have a mechanism
that prevents that. In the same time we want to avoid the phenomena that took place in the 2010s,
Zoltan Nagy-Bege when we reached a connection volume way higher than the available capacity: we ended up with
about 5000 MW built, however, the connection agreements that had been granted suggested a total
Vice-President of over 15.000 MW. We want projects to be more realistic this time around.
Romanian Energy Regulatory Authority
(ANRE)
Romania has had a slower path than other countries in terms of bilateral contracts, what can
investors currently rely on from this point of view? And how do you expect changes in the balancing
market to impact them?
The good news is that starting with January 1st 2020 the EU Regulation 943 which allows bilateral
agreements (PPAs) has entered into force, and it is directly applicable to all member states including
Romania. Meanwhile we also defined the concept of “long term contracts” as those longer than a
month. In theory, anybody who wants to conclude a PPA can do so, the only condition is that they
The RES industry is enthusiastically preparing for a second
obtain a producer license before their first delivery.
wave of development. How does ANRE plan to support
industry members in this process?
So for us the situation is clear, this type of agreement is permitted, but there are still some issues
that leave market participants reluctant. Indeed, Law 123 continues to stipulate that trading on the
We would like a better control of technical connection
Investor confidence centralized markets is mandatory. GEO 74/2020 did modify this law, in a way which allows the conclusion
approvals, and more transparency regarding areas where there
in the Romanian of PPAs, but only for capacities installed after June 1st 2020. This is an obvious discrimination against
is still available capacity. We started an inventory recently to
renewable energy older capacities, in fact the European Commission has already signaled its disapproval. The solution
understand just this, what are the spots where new capacities
market has returned to all these issues may come when Directive 944, essentially the new law of electricity, is transposed
can be integrated, relatively quickly and without additional
into national legislation.
and we want our investment. We have already gone through a few rounds of
actions to prolong this reporting and every week the available capacity decreases, a
Regarding the balancing market, the move to a single price and a 15 minute settlement period places
sentiment. sign that investors’ interest is very high.
Romania among the first in Europe, as the actual implementation deadline was 2025. The month of
February was closed under this model and, while it is early to draw solid conclusions, the signs are all
The main challenge is that a large share of investors and
positive: compared to January the balancing costs went down, and we hope this continues to be the
developers want to place their projects in areas where the
trend.
wind and solar potential is at its maximum (Dobrogea), but the
access is fairly limited because there are already numerous
capacities installed.
The Government is considering Contracts for Differences (CfDs) as an option for support. Do you
see it is a useful tool to encourage the development of renewables?
We also want to change the way in which the available grid
capacity is contracted, we are considering a model based
I don’t think mature technologies still need a support scheme, it would be difficult for end consumers
on auctions. Just now we are in the process of selecting a
to take it on and the industry can nowadays support itself through other means. For instance, I hope
consultant to put together a study that weighs the advantages
to see as many projects as possible that are funded with European money, especially now that we
and disadvantages of this model, and ways in which it could
have so many options available. I would also note that a balanced mix remains crucial - if we pursue
be implemented. The conclusions will be ready in about three
one single direction this balance breaks. We need renewable energy as well as gas capacities, and
months (July), including proposals for alternatives in case
there is plenty of interest for both.
auctions don’t prove to be the best way.
24 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 25EU funds & mechanisms
For the massive investments that are necessary to achieve these
targets, Romania, along with other members states, benefit from
6-8
generous EU financial support.
the Modernization Fund
An essential financial instrument is the Modernization Fund,
gathered from revenues obtained from auctioning 2% of the total
bn. EUR
ETS allowances that all of the members states of the EU pool Modernization Fund
together for 2021-2030. Its precise destination is that of bolstering for clean energy
the clean energy transition in Eastern Europe through investments investments in
Romania
in renewable energy sources, energy efficiency, digitalization,
expansion and modernization of the power grid, battery storage etc.
Romania’s share of the Modernization Fund is 200.766.096 ETS allowances which, pending on the
market value of ETS along this decade, could raise some EUR 6-8 bn in cash for clean energy and
energy efficiency investments. This makes the Modernization Fund the most important EU financial
unprecedented instrument for Romania. Now, in order for Romania to be able to timely and efficiently access the
Modernization Fund, it is paramount that the Energy Ministry does its part.
financial the Just Transition Fund
instruments The Just Transition Fund (JTF) mostly seeks to overcome the economic and social costs of the climate
transition in the most vulnerable coal and carbon intensive regions. In order to unlock funding from
the JTF, EU countries will have to prepare their Territorial Just Transition Plans and pinpoint which
areas will be most affected. Romania certainly has its share of regions that fit the bill, Jiului Valley
being just one example.
We have established that Romania is pursuing very ambitious objectives and the overall economy
stands to gain immensely as a result. The question that remains – how can these efforts be financed?
All things considered (development works, technology, grid improvements etc.) the investments
needed are estimated around the EUR 22 bn mark. the Recovery and Resilience Mechanism
While this may sound intimidating, the current wave of development has access to financing The Recovery and Resilience Mechanism gives Romania access to EUR 29.2 bn. One of the six
instruments like never before. First off, the EU has assembled a series of funds and mechanisms, some pillars of the plan, Green Transition, sets out a dedicated category for renewable energy and energy
fully dedicated to clean energy development and others that point to this sector as a pillar of the efficiency. Projects can benefit from financing if they are mature projects, with advanced technical
future. Adding to this, financial institutions have become reluctant to support conventional sources and economic documentation. They also need firm commitments from final beneficiaries to conclude
of energy, turning their attention (and funds) towards RES instead. And investors are also ready to public procurement contracts by the end of 2022 for at least 70% of the allocated amount, and the
pour in their own money, even more so if the state decides to lend a helping hand through support rest by the end of 2023.
schemes or well thought out market instruments.
26 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 27market mechanisms Contracts for
& financial instruments Difference (CfDs)
At the time of writing, Romanian authorities are pondering
a support mechanism for „low-emissions energy sources”
Power Purchase Agreements (PPAs) have been long awaited by the Romanian RES community and (i.e. nuclear power and RES). They are drafting amendments
2020 brought a series of good news on the matter. And while a public support scheme is not very to the Energy Law and to the ANRE and OPCOM secondary
likely, authorities have been entertaining the idea of Contracts for Difference (CfDs). legislation to accomodate CfDs and provide investors with
the right tools to secure revenues.
Power Purchase Cristina Ghimbovschi
In the initial CfD mechanism proposed by the authorities in
Agreements (PPAs) 2019 producers benefitted from a fixed price level known Head of Project Finance &
as a “strike price”, which reflected the cost of investment Financial Analysis
PPAs are very straightforward for small scale installations of up in a particular technology. An ex-ante “reference price” BCR
to 3 MW – they can be negotiated directly with local authorities would be established annually, calculated on the basis of
and suppliers and concluded outside centralized markets. For the average prices recorded on the centralized markets
capacities beyond this mark some clarifications are still needed. As in previous years. Producers would then move to selling
of 1 January 2020, by virtue of the EU Regulation 943/2019, PPAs electricity on the competitive market - if the price obtained
are legally allowed in all EU member states. This, however, has not was below the strike price, they would receive a payback
been fully reflected in the Romanian law, which has deterred market for the difference. On the flip side, if the market price was
participants to close PPAs out of legal insecurity. higher than the strike price, CfD beneficiaries would have to We need to hedge against risk. In
reimburse the counterparty. this respect we welcome PPAs or
ANRE made efforts to clarify the matter in 2019, when they released state support schemes such as CfDs
an order to say that long term contracts are allowed over-the- that add revenue predictability.
counter, outside of OPCOM’s centralized markets, as long as they
respect certain rules. The Authority also defined long term contracts
as those “longer than a month”. Later in 2020 the Government the role of national In terms of investors we favor those
who:
formally introduced PPAs, for all RES farms built after June 1st 2020.
In September 2020 a new trading platform introduced „centralized financial institutions have an excellent understanding
long-term PPAs”, whereby investors can register and trade electricity To ensure the financing needs of the European Green Deal, of the market and an intelligent
without having a producer’s license. a significant share of funding must be covered by private approach to managing risks
investments and financial institutions. One idea is to set up
a national promotional bank to help issue and trade green carry a medium or long term
The Energy Law also received a few helpful updates: bonds, and access funds from investment banks such as the vision (“here to stay”)
EIB and EBRD.
In order to facilitate investment financing, producers can contract are assisted by consultants with
electricity even if they do not yet have the license in place. They A step in the right direction was in fact taken by the National a proven track record, that can
are, however, required to obtain it at least 60 days before the first Bank of Romania, that is currently preparing a report attest to the project’s viability
delivery. due mid-2021 on the perspectives for green financing at
national level. This is happening through consultation and use proven technologies, as
Market participants who combine electricity produced from parallel working groups on specific topics. The industry opposed to those that are still in
multiple energy sources and those who combine the electric is involved through RWEA, side by side with government a pilot phase
loads of several customers can enter into bilateral agreements representatives, the Romanian Presidential Administration,
for energy aggregation. EIB, EBRD, the World Bank, commercial banks, and relevant have an overall diversified
NGOs. portfolio
28 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 29RES development
from A to Z
30 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 311 understand the legislation
Legislation can make or break a successful energy project (and
1
it has!) so one of the first things to pay close attention to in this
business is the regulatory and legal framework that defines the
industry. Romania’s laws have undergone certain amendments in
understand the past 13 years since renewables first set up shop in the country,
aligned with the European acquis, but also adapted to market
the legislation
2
conditions. The civil law system treats local and foreign investors
equally and is welcoming of overseas investments.
choose & secure *References made to the normative acts in this section include
their most recent amendments (up until May 2021)
your location
3
Foundation of RES Development in Romania
(Law 220/2008)
Law 220/2008 is ground zero, or the birth of a framework for renewable
engage energy in Romania. The law creates the necessary context to encourage
the community investors to move into RES, including through the introduction of a
4
green certificate quota support scheme and priority off-take. The
support scheme is applicable to RES projects commissioned prior to 31
December 2016. Producers benefiting from this support scheme are still
obtain able to gradually sell their certificates up until 2031.
the necessary permits
5
Technical Conditions for Grid Connection
(ANRE Order 51/2009 and ANRE Order 30/2013)
register This order is meant to let investors know what minimum technical
requirements must be met by wind and solar power plants connected
to sell electricity to the grid to operate safely and other useful related matters.
Rules for operation of electricity generation and
storage capacities (ANRE Order 80/2013, as amended)
This document provides the general conditions under which the
license is valid for the commercial operation of electricity generation
capacities and, where applicable, heat produced in cogeneration. This
also includes inter alia storage facilities added to electricity generation
capacities, electricity market obligations and electricity measurements,
the relationship with the transport system operator (TSO) and OPCOM,
financial warranties and specialized personnel, data communication to
authorities etc.
32 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 33Exemption of Certain Consumers from Supporting RES Alternative Fuels Infrastructure
(Governmental Decision 495/2014) (Law 34/2017 and ANRE Order
Certain large industrial consumers are exempted from purchasing their otherwise required quota of 201/2020)
green certificates in order to maintain their competitiveness. Similar to other European countries, this Romania has a relevant history of hydrogen
exemption was notified as state aid and applies until 2024 for an estimated 300 industrial beneficiaries. research and production. In 2017 the country
issued the main rules for alternative fuels
Licenses and Authorizations in the Electricity Sector (ANRE Order 12/2015) infrastructure, and in January 2021 the legal
This document showcases key rules regarding the setting-up authorizations for RES capacities and framework for licensing hydrogen installations.
commercial exploitation licenses, amendments and transfer of such authorizations and licenses, as
well as other rights and obligations for owners of RES capacities. Single Imbalance Price
(ANRE Order 213/2020)
GCs Mandatory Annual Quota (ANRE Order 157/2018) Romania aligned its balancing market with
Investors that benefit from the GCs support scheme enjoy transparency regarding the calculation of the EU’s recommendations regarding a
their annual mandatory quota. This document provides details about the calculations for the year of new method for settlement of single-price
analysis, and the next year as well in situations of GCs quota non-compliance. imbalances: the new method applies to a
single settlement price, and a 15 minute
Welcome Prosumers (ANRE Order 226/2018) settlement interval.
The year 2018 marks the introduction of the “prosumer” concept in Romania’s legislation, allowing
New Trading Possibilities
individuals to produce their own green energy and inject any surplus into the distribution grid. They
(Law 155/2020 amending
can sell the energy directly to the main supplier and the price they received is equal to the weighted
Energy and Gas Law)
average price on the day-ahead market in the previous year.
In order to secure financing, investors now
have access to a new trading possibility
i.e. to conclude PPAs without having a
Romania’s Energy Strategy producer’s license (but subject to obtaining
2019-2030 with a 2050 Perspective it within at least 60 days before their first
delivery). As an exception from trading on
In November 2018 Romania’s Ministry of Energy released the centralized markets, economic operators
country’s new energy strategy, which had been long awaited by that mix various electricity sources or
the industry. The need for new investments (to upgrade obsolete the loads of several clients are allowed
production capacities, introduce new technologies with low to conclude bilateral agreements for
environmental impact, develop interconnection installations etc.) agregation with owners of these sources
is evident from the pages of this strategy. The document was or their customers and suppliers.
amended in 2020 and is still awaiting approval of its final form.
A New OPCOM Centralized
Market for Conclusion of PPAs
National Plan for Energy and Climate Change 2021-2030 (NECP) (ANRE Order 129/2020)
The new platform was designed to offer
The NECP was submitted to the European Commission in April 2020. Its policies and measures pursue
long term electricity trading possibilities
the decarbonization objective assumed by Romania as a member state. Romania commits to a total
to renewable energy investors who
of 30.7% of RES-electricity in its final energy consumption mix by 2030.
have not yet obtained their commercial
exploitation license. Confirmation of the
Licensing Energy Storage Installations (ANRE Order 198/2020) trades performed is, however, subject to
Yet again, investors move faster than the legal framework and in 2018 and 2019, the first electricity obtaining the commercial exploitation
storage capacities are installed as pilot projects. The legislation for licensing the energy storage license before delivery of the electricity to
installations enters into force only in November 2020. the off-taker.
34 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 35>8
choose & secure 7.5
your location 7.0
6.0
5.5
5.0
conduct preliminary studies
4.5 Two aspects are crucial
4.0 when selecting the location
Depending on the project’s nature, you should first understand of a project: the ability
exactly how much energy could be obtained in your location3
All this of course, does not
happen overnight. Building
engage trust, earning the good will
and cooperation of locals, and
You can and should work hand in
hand with the authorities, who after
the community projecting an overall positive
image of the investment
all share the goal of bettering the
community. It is important to say that
the business is here to stay and not
project takes time and effort
in our personal life, as well as be stingy about sharing the benefits.
A very important, albeit often neglected dimension of planning in business. You need to show
In particular, your communication specialist – there should be
for the development of wind and solar farms is building trust and genuine involvement and get a
one as it is far more expensive to miscommunicate – needs to
gaining the cooperation of local communities. real grasp of the place’s history
be familiar with the main narratives in the central and local
and traditions, and pay respect
media. Stories that sift through social media also have ripple
This is an aspect that goes above and beyond the developer’s to its cultural norms.
effects and shape public perception, for the better or worse.
legal obligation for public consultation, as it involves an actual
When handled poorly, the collective emotions triggered by
in-depth understanding of local public perceptions, beliefs, fears, Undoubtedly, CSR actions
such narratives translate into fears and concerns about the
expectations, and risk assessments with regard to the planned are one way to go to build
presumed negative effects of the project’s operation upon the
investment. A diligent developer will anticipate the economic, confidence and earn sympathy
local environment, agriculture, biodiversity, public health etc. If
environmental, and public health impact and plan accordingly. by addressing, for instance,
the case, these must be addressed in their own terms, through
Once you get a proper understanding, a set of accessible and some nagging challenges
direct engagement and accessible, though well-documented
common sense explanations must be tailored to the public. to local infrastructure (i.e.
communication.
repairing a road or fixing a
Talk clearly and honestly about the benefits of building and bridge), renovating a school or
operating a RES project in the community: kindergarten, refurbishing a
local medical office, or offering
Taxes on foundation and construction – e.g. the turbine tower and some form of material aid to the
PROPERTY & foundation taxes – are paid directly to the municipality. In many more economically vulnerable
CONSTRUCTION areas, rural and otherwise, these payments make for an important part of the community (e.g.
TAXES
source of revenue for the local budget; school supplies for pupils from
low-income families).
RENT Rent payments to landowners for their leased surfaces – turbines
PAYMENTS are there to stay, which means safe money for the long run;
Quality jobs for the local workforce from builders to engineers,
in different stages of the wind farm’s development. This is where
Amalia Anghel
QUALITY nation and country level authorities can lend a helping hand by
Corporate Communication Manager
JOBS putting together formation, reskilling and upskilling programs. Not
ENGIE
to mention the effect of horizontal multiplication, with a variety of
new jobs in services and production;
We are glad to see that in Romania, unlike in other countries,
there is a favorable perception among local communities
Grid modernization, reinforcement and expansion and transport
regarding wind energy. People understand that, in addition to
GRID infrastructure upgrade. This is a win-win situation: helping locals
having cleaner energy, their community benefits economically
MODERNIZATION by attracting more investments into the region and modernizing
from taxes to the global budget and jobs generated directly or
neighboring roads;
indirectly from the construction and operation of parks.
CSR ACTIONS CSR actions bring added value to the social life and wellbeing of
local communities.
38 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 39obtain the necessary permits
The permitting process in Romania is actually simpler and faster
than in most other EU jurisdictions. But it is still important to make
sure your documentation folder is complete upon submission, with
maximum
all steps taken in the right order and a timely fashion. time
to complete
the process
What makes a difference when dealing with the authorities is coming
from a place of understanding and patience. Obtaining a permit can
seem simple and straightforward but sometimes rules vary from one
jurisdiction to another in Romania and some flexibility is needed. construction phase
yes CERTIFICATE OF
URBANISM FOR UZP COMMISsIONING
AND ENERGIZING
LOCATION
STUDIES no UZP APPROVAL
CONNECTION
CERTIFICATE
ANRE
City Hall/County Council
EMPLACEMENT EIA DSO/TSO
PERMIT (ENVIRONMENTAL Local Environmental Authority
IMPACT ASSESMENT) ENVIRONMENTAL
AUTHORIZATION
GRID SOLUTION
STUDY or SHEET
CERTIFICATE OF
URBANISM FOR
ATR (TECHNICAL BUILDING PERMIT LICENCING THE
CONNECTION PERMIT) RES CAPACITY
CONNECTION
BUILDING PERMIT
AGREEMENT
setting up
authorization REGISTER TO SELL
ELECTRICITY
40 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 41Building Permit
(Authority: Local City Hall or the County Council, depending land positioning / Term: 30+ days)
The permit is the key document that gives you permission to start construction on your renewable
energy project, as well as the necessary electrical connection works, internal roads etc. The building
permit may also establish a period during which the works must be commenced (usually 12 months)
and a period during which they must be completed (usually 24 months from commencement).
Before applying for this permit, a separate Urbanism Certificate and related permits must be obtained
for the construction of the RES production capacity, crane platforms, internal roads, substation and
CIVIL PERMITS related connection works. A technical documentation for building permit must be drafted by an
architect and submitted together with relevant permits with the authority.
Setting Up Authorization
Urbanism Certificate for Urban Zonal Plan (UZP) (Authority: ANRE / Term: 60 days)
(Authority: City Hall / Term: 30 days ) This is the administrative act which confers you the right to build the RES production capacity. It also
Demonstrates the legal, economic and technical regime of the property where the RES facility will be grants you complementary rights to the legislation, especially during the construction period (e.g.
built. passing and/or storage rights on the third parties lands).
Urban Zonal Plan (UZP)
(Authority: Local City Hall or the County Council, depending on land positioning / Term: 30+ days)
An UZP is always needed, unless there is a General Urban Plan (GUP) in place that already allows the At this point you should have the project financing secured because
construction of RES projects in the area. This plan plays an essential role because it defines how the relevant proof will be requested by the authority.
project will look, the impact it will have on the land, utilities’ network etc.
Acceptable financing sources are: investor’s own capital, proof of credit
lines or loans, bank guarantee letters, loans granted by natural/legal
Environmental Permit for UZP Phase & Building Permit Phase persons, non-repayable financing from national or international bodies,
(Authority: Local Environmental Authority / Term: up to 6 months, depending on project complexity) other documents of a contractual or pre-contractual nature relating to the
The length of this procedure varies based on the area in which the project is developed and the type financing of the investment.
of technology used.
Environmental Impact Assessment (EIA)
(Authority: Local Environmental Authority / Term: 60+ days) Dana Dinescu
Establishes the conditions and the environmental protection measures that must be complied
with during the development and construction of the RES facility, connection to the grid, roads Managing Director, PNE Wind
infrastructure, substation etc. The local community should be informed of the environmental Board Member, RWEA
authority’s final decision.
In order for projects to be bankable, you have to do everything “by
Projects with a potentially significant impact on the environment, after completion of the first stage the book”, starting with contracts for land securing and auditing,
of the procedure, may require a mandatory report on the EIA. In practice, an EIA is required for wind wind measurements and studies validated by international
energy projects but usually not for the overhead lines and other grid upgrade works. companies, geotechnical and geophysical studies, environmental
impact studies, up to grid connection solutions and the project
authorization from A to Z. The development is like a puzzle. If
you do not arrange the pieces correctly, with know-how and a
The Environmental and Social Impact Assessment (ESIA), though not lot of work, mistakes occur in the end, that could block a project,
required by Romanian legislation, is useful in order to obtain bank or lead to higher implementation costs. Quality makes the
financing, and thus recommended as an additional step. difference. And passion contributes to the project’s success.
42 CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA CODE OF GOOD PRACTICE || RENEWABLE ENERGY IN ROMANIA 43You can also read
